Lesson 5 Defined Contribution Plans—An Overview
Like it or not, defined contribution (DC) plans are the wave of the future. Understanding how they work, and how to make them work to meet your needs, is a critical part of your retirement strategy.
DC pension plans come in several flavors, each with their own particular quirks. They all share common traits: A formula determines how much is contributed for each participant, and each participant has a separate account or readily identified share of a pooled account. The ultimate benefit depends on the investment results of the account.
This design concept has important implications for both plan sponsors and participants.
For Plan Sponsors
Most importantly, because there is no fixed retirement ...
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